DELB BB

Delhaize Brothers and Co The Lion - DelhaizeGroup

Consumer, Event Driven/Special Sit


Presented:06/17/2015
Price:€79.97
Cap:$9.34B
Current Price:€102.80
Cap:$11.92B

Presented

Date06/17/2015
Price€79.97
Market Cap$9.34B
Ent Value$10.76B
P/E Ratio61.8x
Book Value€58.71
Div Yield2.02%
Shares O/S102.63M
Ave Daily Vol540,000
Short IntN/A

Current

Price€102.80
Market Cap$11.92B
Etablissements Delhaize Frères et Cie ‘Le Lion’ (Groupe Delhaize) Société Anonyme, together with its subsidiaries, operates food supermarkets. It also operates other store formats, including proximity, cash and carry, and specialty stores. In addition, the company sells its products to affiliated stores that are operated by independent third parties, as well as offers food, care products, care services, and accessories for pets. As of December 31, 2014, its sales network consisted of 3,402 stores in Belgium, Luxembourg, the United States, Greece, Romania, Serbia, and Indonesia. The company was founded in 1867 and is based in Brussels, Belgium.

Publicly traded companies mentioned herein: Delhaize Group SA (DELB BB), Koninklijke Ahold NV (AH NA), SUPERVALU Inc (SVU), Wal-Mart Stores Inc (WMT)

Highlights

The presenter is long shares of Delhaize Group (DELB) in anticipation of a deal getting done with Royal Ahold. The two companies have been the target of merger speculation since the mid-2000s and in May, 2015 the management teams acknowledged having preliminary discussions about a potential merger. Given the complementary nature of the two businesses and how relatively undervalued DELB stock is, he sees a more favorable risk/reward (7.50 risk vs. 20+ potential reward) by playing the European owner of Food Lion (please note, all figures are in euros unless otherwise specified). He outlined the framework for his bullish bias as follows:

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Idea Discussion

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